Factors Considered in Facility Location

Factors Considered in celerity localization principle zeal Location is the right arrangement for the manufacturing inst onlyment, it will allow equal access to the customers, workers, superman, and so on For commercial success, and combative advantage following ar the lively factors boilers suit objective of an organization is to satisfy and delight customers with its harvest-feast and services. Therefore, for an organization it becomes important to call for strategy theorise around its manufacturing unit. A manufacturing unit is the induct where all inputs such as raw cloth, equipment, adroit labors, etc. come together and manufacture products for customers. One of the most critical factors find out the success of the manufacturing unit is the position. rapidity location is actually a term used in operation management, celerity location or location synopsis is dvirtuoso so that the better uses of the location send packing be understood. The company by reaso nableness the materials and return process done nearby the location can save ample era in production process and also save a lot in terms of delightation system cost. And also the company can find out optimum position for the location of the company so that all the factors that be needed will be not a wide distance from the company.Facility location determination is a critical strategic decision. There argon several factors, which determine the location of adeptness among them competition, cost and corresponding associated effects. Facility location is a scientific process utilizing various techniques.Location Selection FactorsFor a company which operates in a global env iron outment cost, available infrastructure, labor skill, presidential term policies and environment are very important factors. A right location provides adequate access to customers, skilled labors, transportation, etc. A right location ensures success of the organization in current global competitive e nvironment.IndustrializationA geographic subject field becomes a focal point for various facility locations found on some factors, parameters and issues. These factors are can be divided into old factors and secondary factors. A primary factor which leads to industrialization of a particular area for particular manufacturing of products is material, labor and presence of similar manufacturing facilities. collateral factors are available of credit finance, communication infrastructure and insurance.Errors in Location SelectionFacility location is critical for business continuity and success of the organization. So it is important to negate mistakes while making excerption for a location. Errors in selection can be divided into two broad categories behavioral and non-behavioral. behavioural errors are decision made by executives of the company where personal factors are considered before success of location, for example, deed of personal showment from hometown to new location facility. Non-behavioral errors include lack of right investigative practice and analysis, ignoring critical factors and characteristics of the sedulousness.Location StrategyThe goal of an organization is customer delight for that it needs access to the customers at negligible possible cost. This is achieved by developing location strategy. Location strategy helps the company in determining product offering, foodstuff, acquire forecast in different markets, outgo location to access customers and best manufacturing and service location.Factors alter Facility LocationIf the organization can configure the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. For commercial success, and competitive advantage following are the critical factorsCustomer propinquity Facility locations are selected closer to the customer as to slim down transportation cost and decrease judgment of conviction in r distributively ing the customer.Business Area Presence of separate similar manufacturing units around makes business area conducive for facility establishment. handiness of Skill Labor Education, experience and skill of available labor are another important, which determines facility location.Free Trade Zone/Agreement Free-trade zones promote the establishment of manufacturing facility by providing incentives in custom duties and levies. On another hand free trade agreement is among countries providing an incentive to establish business, in particular, country.Suppliers Continuous and quality supply of the raw materials is another critical factor in determining the location of manufacturing facility.Environmental Policy In current globalized world pollution, control is very important, therefore understanding of environmental policy for the facility location is another critical factor.Some of the benefits in location analysis includeYou get a thorough knowledge of all the factors involved in the p roduction, and ways through with(predicate) which the materials that are needed in the production can easily be accessed.When you do a proper location analysis for your facility you will also come across alternate substitute materials that are readily available and will cost less.You can save a lot on transportation cost for materials, savvy, import and export.The materials will be available at a comparatively low cost.The best way to get a task done is by finding out ways through which the task can be done. Location analysis helps you in those aspects.Allows to you differentiate between practical positions to place your facility. Like for example, you cannot build a hazardous facility in a residential area.Gives you access to tatty labour, and needed raw materials like water electricity and many to a greater extent.Helps in a smooth trial of an organization, by seeing to that all that is possibly needed is readily and easily available. excessively has very liberal access to p roduction, distribution and sale of the products.Allows you to outperform your competitors facilitiesOnce you have found the optimal location consequently you will very easily overcome all the issues that you are likely to face and have a smooth running of an organization. When you plan accordingly, you will also be prepared to face some electric razor loads.FACILITY LAYOUTFor an organization to have an effective and efficient manufacturing unit, it is important that special attention is given to facility layout. Facility layout is an arrangement of different aspects of manufacturing in an appropriate manner as to achieve desired production egresss. Facility layout considers available space, final product, pr blushtivety of users and facility and convenience of operations.An effective facility layout ensures that there is a smooth and steady flow of production material, equipment and manpower at minimum cost. Facility layout looks at somatic allocation of space for economic ac tivity in the plant. Therefore, main objective of the facility layout planning is to programme effective workflow as to make equipment and workers more productive.Facility Layout ObjectiveA model facility layout should be able to provide an ideal relationship between raw material, equipment, manpower and final product at minimal cost under safe and comfortable environment. An efficient and effective facility layout can cover following objectivesTo provide optimum space to organize equipment and drive movement of goods and to create safe and comfortable work environment.To promote order in production towards a single objectiveTo reduce movement of workers, raw material and equipmentTo promote safety of plant as well as its workersTo facilitate extension or change in the layout to accommodate new product line or engineering science upgradationTo increase production capacity of the organizationAn organization can achieve the above-mentioned objective by ensuring the followingBetter training of the workers and supervisors.Creating awareness roughly of health hazard and safety standards best use of goods and services of workforce and equipmentEncouraging empowerment and reducing administrative and other indirect workFactors altering Facility LayoutFacility layout designing and implementation is tranced by various factors. These factors vary from effort to industry but influence facility layout. These factors are as followsThe design of the facility layout should consider overall objectives set by the organization.Optimum space needs to be allocated for process and technology.A proper safety measure as to avoid mishaps.Overall management policies and future direction of the organizationFactors Influencing Location of IndustriesThere are different kinds of industries and each one required different kinds of inputs.Further importance of different inputs varies due to their change cost or they require in various proportions or ease/difficulty in availability o f different inputs or various scale of industrial operation or any such reason.These factors cannot be distributed ubiquitously around the world.The value, bulk, brio and care required for different types of produce vary considerably across different type of industries. also different inputs required vary in cost as well as in proportion.Also with changing technology and peoples aspirations the relative importance of these location governing factors changes over magazineThus they have different capacity to exert different pull to locate an industry in their favour.Location of Indian Cement laborDecisions regarding industrial location have a unique place in the field of industrial management and areaal planning because such decisions have long-term implications for the health and well-being of an thrift and because they are almost irreversible. Most industries involve huge investments, which generate cash flows over a long period of time and the history testifies that the success of an industry depends significantly upon the appropriateness of its location.Factors Affecting LocationAvailability of Raw MaterialThe various determinants of the optimum location of a particular industry play varying role in the location of different industries. In the cementum industry, availability of raw material and fuel, and transport cost are more significant than the other factors because cement is a saddle losing and bulky product. Its weight losing nature argues for location near raw materials while bulkiness favours location near the market. Since Webers (1929) material top executive (ratio of localized material to output) is more than 1.5 for cement, the net effect of these two factors favours nearness of raw-materials. As a result cement factories are, in fact, located in close proximity to the sources of raw materials. Most cement manufacturing units are established within a radius of 15 to 20 kilometers of spreadstone deposits.The raw materials required for ceme nt are limestone, clay, and gypsum. Although limestone deposits and clay are available in fairly vainglorious quantities all over the country, proximity of railhead is meaty for reducing the transportation cost. The availability of gypsum may not affect location for its requirement is only about four per cent. Cement, in most plants in India, is manufactured through the wet process and thus rotund quantities of water are needed. However, as water is available in good quantities throughout our country, this does not affect location. The only important consideration seems to be the availability of combust since diesel, the alternative source of fuel, is considerably more expensive. The availability of combust pulls the industry towards Bengal and Bihar and, to some extent, Orissa, Andhra Pradesh, Maharashtra, and Madhya Pradesh.Regional Demand and SupplyThe region-wise contend for, and capacity and production of cement in India in 1971, the latest year for which data are availab le, are presented in remand 1. They indicate that demand is in excess of supply in the Eastern and the Northern regions, while instead the reverse is true for the Western and the Southern regions. An examination of the past data indicated that this trend has been prevailing for long. Thus, the market criterion alone would argue for expansion of cement industry in the Eastern and the Northern regions and for its muscular contraction in Western and Southern regions.Managements InterestThe choice of location of a new factory to a certain extent depends on the managements interest in a particular region. If the management has country-wide industrial interest, mayhap this factor would not merit attention in location studies. However, if the management has regional or local industrial interest this factor becomes a decisive one. Both these kinds of managements interest are found in the Indian cement industry. On the one hand, we have Associated Cement Companies Ltd. (ACC) and Dalmia Cem ent (India) Ltd., whose intersts are country-wide. On the other hand, there are cement firms run by state governments, such as Andhra Cement, Madras Cement, and Orissa Cement, whose interests are restrict to its development within their own territories.Since South India possesses more regional entrepreneurs willing to float cement factories at present, the Southern region continues to have more cement factories than other regions.Government PolicyFor quarrying of limestone, the cement industry has necessarily to depend on the government for lease terms. Besides, encouragement and facilities or discouragement and hindrance from government do exert their influence on location. In the early days, the then princely states support the expansion of the cement industry in their territories. Thus, out of eleven factories existing in 1936 at the time of formation of ACC, as many as five factories were in princely states and in reference of one, viz., the Punjab, the tyke Government was d irectly interested in capital and management.Recently, the governments have evinced keener interest in developing the cement industry in industrially cotton plant Textile IndustryCotton textile industry is one of the oldest industry in the world.Since textiles are one of the basic needs of every person there is unendingly sufficient demand for it.Cotton textile industry requires raw cotton, insolent and large labour pool(automation has bring down its importance in some areas), power, good transport, humid climate (large plant may maintains it artificially) capital, market, etc.Cotton is regarded as nearly pure raw material since it looses very little weight in bear on and it is very easy to transport raw cotton and cotton textile with nearly similar cheap rates.Thus the pressure of raw material as seen in the case of iron and vane industry is absent here.Thus other locational factors particularly transport, labour, power and market become important.With good transport facility it can be established anywhere but where power supply present.Development of electricity has cut down its dependency on the source of power supply and automation has diluted the need of skilled large labour pool requirement.Now the considerations of market to link the industry effectively with the consumer and employment generating capacity of this industry are becoming more significant in locating this industry.Initially it was in the form of at sea small and cottage industry but latter with the development of spinning and weaving machinery in England it started acquire importance as a large regular industry.Britain was first to had a quick enlargement in production pattern of cotton textile industry with home invented machinery.Due to durability, fineness, uniformity and above all cheapness of produce Britain got prominent position in cotton textile sector of the world by giving local small scaleIndustries very very tough competition.Iron and Steel IndustryIron and steel is one of the most basic industry since it is a close input to many other types of industries.But the pattern of demand and technological changeshas brought some interesting locational shift in this industry.In early days when the iron smelting technology started getting industrial importance in Europe the demand was low and mostly of local nature.At this juncture charcoal obtained from forest wood was used with lime to make sponge iron.Abundant forest was present everywhere and so small plants were located locally near the forest.This led to dispersion of this industry up to midi eighteenth century.During this time the use of coal in iron smelting gradually started maturing.Attraction to coalfield regions was also governed by then available technology and demand. afforest area started shrinking (about one acre of forest log required to smelt five tone iron) demand for iron increased considerably due to starting of heavy engineering works, required iron ore to coal ratio was 1/8, coal pr oducing regions already had some iron work history and pool of labour required, at some places iron ore was found associated with coal and like factors, all resulted into the establishment and shift of iron industry in coalfield areas.The development of the Appalachian region of North America, Liege in Belgium, the South Wales and the Sheffield region of England, etc. are good examples of attraction of coalfield to iron and steel industry.Since late eighteenth to the end of 19th century Coal field enjoyed its position and witnessed heavy development of iron and steel and related industrial agglomeration.During this period it has developed sufficient industrial inertia at many places and thus survived successfully even in twentieth century.But not all coalfields witnessed similar developmentsThose located in remote areas, sparsely populated area and poorly developed area were remained engaged in exporting coal at cheaper rates.This helped in aspect of industries also at coastal loc ations where iron made with imported raw materials are available for export.Japanese plants and to some extent Vishakhapatnam plant of India belong to this category.In last fifty to century years the role of market also become significant.A big market helped in setting large integrated steel plant and in providing scrap iron as raw material to reduce transportation cost.So they also attracted iron and steel plant near to them.Since iron and steel is regarded as one of the most basic industry as an indicator of industrial development of a region and so many region hitherto undeveloped and have some capacity are aspiring for it.Here government policies play very deciding role as seen in the case of the development of iron and steel industries in the Chotanagpur plateau of India which also has many other advantages.Thus location of iron and steel industry in the world has responded effectively to the changing nature of different factors of industrial locations.